But the treasurer has also been hit with some good luck – including the state’s property prices, which continue to surge. While the number of property transactions has been weak amid high interest rates, the government expects further rate cuts to boost buyers’ confidence, helping to bring in more than $13 billion in revenue from transfer duties such as stamp duty this coming financial year.
The state’s overall revenue will hit a record $124 billion in 2025-26 – nearly $1 billion more than forecast six months ago. And over the next four years the state government expects to rake in $11 billion more than it forecast back in December. That’s also thanks to a higher GST carve-up for the state than expected, and stronger federal government funding for areas such as schools and transport infrastructure.
The state’s net debt will climb from $109 billion to nearly $134 billion by June 2029 – more than four times the amount spent every year on the state’s health system. As a share of the state’s economy, however, the government’s net debt will climb from 12.8 per cent this year to nearly 14 per cent in 2027, before tapering back to 13.1 per cent by June 2029.
While the state’s finances are broadly in shape, the outlook for the state’s economy is weaker than previously expected. Real gross state product – a measure of NSW’s economic growth – has been revised down to 1.75 per cent in the coming financial year, from the 2.5 per cent expected six months ago.
Mookhey blames this partly on geopolitical uncertainty, but that’s far from the full story.